Watchdog wants fair trade rules for Facebook, Twitter, Google

Summary:A leading regulatory watchdog is petitioning the Federal Trade Commission (FTC) in a bid to establish a "trade regulation" framework, which would set out how web companies like Facebook, Google and Twitter can operate lawfully.The Center for Regulatory Effectiveness (CRE) is looking for ways to protect U.

A leading regulatory watchdog is petitioning the Federal Trade Commission (FTC) in a bid to establish a "trade regulation" framework, which would set out how web companies like Facebook, Google and Twitter can operate lawfully.

The Center for Regulatory Effectiveness (CRE) is looking for ways to protect U.S.-based web-based services or companies, by bidding the FTC to define acts or practices which they consider unacceptable.

While Google and Twitter are both under FTC investigation, Facebook is subject to a petition for federal investigation, to deem whether they are acting unlawfully.

The FTC can ban acts or practices that can cause "substantial injury to consumers which is not reasonably avoidable by consumers themselves", adding that it can take action also if these practices are not outweighed by countervailing benefits.

For example, if Facebook were to reset everyone's privacy settings each time they were updated, this could be considered an act in which the FTC would deem unacceptable, and could cause 'injury' to the subjects involved.

But, as the CRE believes, there are lacking rules and regulations to govern web-based services, it creates a perception that the FTC is interpreting "ambiguous rules" to obtain a "preconceived solution".

The five-page petition sets out the CRE's arguments, which include a "sound and legal framework" which would then avoid web companies and services inadvertently harming, not enhancing their businesses.

The three main benefactors to this proposed legal framework, as the CRE point out, include those that are already under investigation by the FTC.

Google is fighting on multiple fronts against the federal giant, one in focus to "address fundamental questions of business operations" in the core search advertising business.

Twitter is also under extreme scrutiny for allegedly taking advantage of developers who use the platform to build products and services. Facebook, however, recently only received a slap on the wrist by the FTC because of its privacy settings.